Sharpness is an artificial edge enhancement, so you want to turn it down as low as you can.
What setting works best depends entirely on your TV, the source (DVD, Blu-ray, satellite game console, etc), and even the cable type used to connect the source to the TV. If the sharpness is set too low, edges can look blurry, fuzzy, generally not well defined. If the sharpness is set too high, you'll see artifacts, with edges exhibiting a glowing halo effect.
The easiest way to set the sharpness is with text displayed on the screen. Turn the sharpness all the way down, display some text on the screen, and begin turning the sharpness up until you don't notice the edges of the text getting any sharper, more defined.
Again, the source plays a big part in sharpness settings. A setting that works for a game console may be too high for DVD or Blu-ray (both of which include edge enhancement during the mastering process). There isn't one setting that works best for everything.
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